Colorado Sen. Bennet explains wind-energy tax credit

Source: By Bridgett Weaver, Greeley Tribune • Posted: Tuesday, January 20, 2015

Best scenario would include support for renewables

Known as a Production Tax Credit, or PTC, it is a 2.2 cent credit per kilowatt hour given to wind farmers on electricity generated from wind, which ultimately reduces the cost of developing a wind farm and helps wind-turbine companies compete in the energy markets.

Despite cries by many legislators to generate a long-term solution to the government subsidy, Congress recently extended the PTC only through the end of the 2014. Companies that began work in 2014 were able to claim the credit, but no future for the credit was determined, which has left wind energy in a position of uncertainty for 2015.

Those who oppose a long-term extension think that wind energy has had plenty of time during the last 20 or more years to become independently successful. They say the energy produced by wind is not as reliable or affordable as energy produced by other resources, such as coal and natural gas.

Proponents, however, say wind energy is a big creator of jobs in Colorado and across the nation, and it is a clean source of energy. They also say other energy industries have similar tax credits built into their codes that don’t come up for a vote every few years and create uncertainty in their industries.

Bennet, a Democrat from Denver, said it is of the most importance to pass a bill that creates a long-term solution for wind energy.

Here are his response to several questions:

 Why do you think it’s important to extend the PTC?

It’s critically important to give certainty to this vital industry in Colorado. And nationally, the wind industry accounts for more than 75,000 jobs in the country and roughly 5,000 in Colorado, and by some estimates around 2,600 in Weld County alone. So that’s what’s so critical about it. It’s not just about the windmills themselves. It’s about the entire manufacturing industry and the subcontractors who are part of that. Many of whom are right here in Colorado that need the certainty that an extension or some other signal will give them in order to move forward.

Vestas is a great example. They were laying people off in 2013 and 2012, and in 2014, I think they announced that they would be hiring 800 employees in Colorado, with 300 of them in Windsor.

Will we see the growth move into 2015 with this?

Not unless we figure out how to either extend the wind PTC or somehow through a permanent reform of the tax code supporting figuring out provisions to support the renewable-energies sector including wind. So that’s the challenge. There was a short-term extension at the end of the (2014), and they called it a one-year extension. It was the phoniest Washington D.C. approach to the world. It was actually in the case of wind, a two-week extension. So now that’s gone. So we’ve got to go back to work on the Finance Committee and see whether we can get to an agreement.

What would be the best-case scenario?

I think the best-case scenario would be long-term permanent reform of the tax code, including provisions relating to renewable energy. That encourages innovation, encourages growth and allows industries to plan. And I would even support some form of a technologically neutral energy tax credit that didn’t ask whether is was wind or solar or fossil fuels or anything else. A tax credit that supported innovation. That would be the ideal. And to get that done, we’re going to need Republicans and Democrats working together on the Senate Finance Committee. For right now, we’re not in great shape because, as I mentioned, the extension has expired.

Do you think you will be able to work together to accomplish this?

I think the important message for us to convey to Washington is that at a time when our economy is growing, but incomes are not yet growing, it is really important for us to find ways that support industries that are driving wages up. The energy industry, whether it’s renewable or it’s traditional, is one of those industries that’s driving wages up. And what people have to understand most is that this isn’t some sort of fantasy. There are actual high-paying manufacturing jobs right here in the United States that are vital to the supply chain for wind energy. And there are certainly Republicans that understand that and this credit has always been bipartisan. There’s been a big change in Washington, and I think the obligation continues for people to be able to demonstrate to the American people we can actually produce for them. It’s not just about fighting among ourselves, which is what it’s been for too long. So I can’t predict success, but I think with those of us that are interested in this – and there are a bunch of us – we just have to keep making the case.

What do you say to those against extending the PTC?

I think that it’s important that people understand that there are interests in Washington that want to fight to hold on to things just the way they are because it suits their purposes. But we’ve got to make sure that when we examine our tax code, we’re asking the question, are these provisions in the code more or less likely to help the private sector produce jobs? If they’re less likely to do that, we shouldn’t have them. If they are likely to do that we should have a debate about whether or not the priorities align to those tax provisions. And I think the wind provision has demonstratively provided jobs and good wages all across rural America.